Brothers turn company into international supplier

When talking about entrepreneurs, most people think about startups, where someone opens and builds a business from the ground up. Jim and Bill Derry of Rockford are more like opportunists.

Alex Gary

When talking about entrepreneurs, most people think about startups, where someone opens and builds a business from the ground up. Jim and Bill Derry of Rockford are more like opportunists.

Both were in established careers: If they just kept their noses to the grindstone, they were likely to retire to the golf course in a few decades. Instead, they identified a small company with potential to grow and decided in 1990 to jump in with both feet.

The company was Field Fastener Supply, then based on the 600 block of South Main Street with 12 employees and $1 million in annual revenues. Today, the Derrys run a multi-location supply business out of a 10-year-old building in Machesney Park. They have 55 employees and more than $20 million in annual sales.

To buy Field Fastener, the Derrys invested all they had saved to that point but still needed to borrow $600,000, of which $510,000 was guaranteed by the Small Business Administration’s 7(a) loan program. The program is geared toward high-risk ventures that banks would be unlikely to back without help.

“It was a scary move, honestly,” Jim Derry said. He was 29 and selling computer systems in Minneapolis when they decided to buy Field. “But we’d just started a family, and I have six brothers and sisters in Rockford, and my wife’s family is from Illinois.
The timing was such that I was young enough to do it where if it didn’t work out we could rebound.”

Bill Derry was 10 years older, with three kids and years of working in the fastener industry with Textron Fastening Systems. Bill was working for Rockford Products when they bought Field. At first, he was just an investor, not leaving Rockford Products for two years.

“I wasn’t really sure if my style could fit in the corporate atmostphere forever,” Bill Derry said. “If we could grow this thing, it would give me an option, and that’s how it worked out.”

The company grew immediately. The Derrys said company founder Dave Field had built a large customer base by being a secondary or emergency supplier of fasteners — such as bolts, screws and studs. His customers called Field Fastener Supply when they needed something that day.

“Field had a very good reputation with literally hundreds of companies in the Rockford area,” Jim Derry said. “But he had never really called on companies to say, ‘Hey, we supply these parts, what else do you really need?’ ”

Jim Derry said Field Fastener has averaged 20 percent annual growth in the 17 years they’ve had the business, and he and Bill believe they can double the business again in five years.

Field Fastener now offers two main services. It provides inventory management systems, keeping track of inventory and replenishing the supply when needed. It also offers technical support, helping companies find the best way to fasten, join and assemble their products. As an example, Jim Derry said it will break apart a product of one of its customers, such as a thermostat, to see if the customer can cut costs by consolidating some of the fasteners needed to make the product. Field’s companies use the fasteners to put together things such as valves, actuators, grocery carts, shelving units, chemical dispensers and fire suppression systems.

“The products we sell — the nut, the bolt and the screw — are no different than our competitors,” Jim Derry said. “What makes us unique are the services we wrap around the product.”

The company has grown mostly from within. The Derrys have completed just two significant acquisitions. In 2001, they bought a suburban Chicago fastener distributor to gain a foothold in Chicago. This fall they bought an equipment line from bankrupt Rockford Products Corp. for $300,000.

Jim said the 2001 purchase was one of the biggest decisions of their tenure at Field, and it proved even trickier when a slumping economy tumbled into a recession after the Sept. 11 terrorist attacks in New York, Washington and Pennsylvania.

“That’s the one time we really had to make some tough adjustments,” Jim said.
The old customer book also largely is no more. Rockford once was known as “the screw capital of the world.”

“Most of those companies are gone. It’s sad to see, really, but now almost all of our growth is national and international,” Jim said. “You always have to leverage relationships to find new customers.”

Assistant Business Editor Alex Gary may be reached at agary@rrstar.com or at 815-987-1339.

Small Business Survivor advice

Anyone who has raised boys or watched brothers battle with each other daily may find it difficult to believe the following statement: “In our 17 years of working together, we’ve had two disagreements and one we don’t remember even what it was about,” said Bill Derry, president of Field Fastener Supply, which he runs with his younger brother, Jim Derry.

The Derrys bought the company in 1990, but before doing so they sat down and wrote out exactly how the two would handle their respective roles.

“Since we were putting so much into the business, we didn’t have two extra nickels to go to an attorney. So we put together a two or three page memo of understanding in layman’s language. How were we going to run the business? On what basis were we going to make decisions? What was the ownership share going to be and who was going to be responsible for what roles? It provided the foundation that we’ve used to grow the company.”

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